The business behind the show

Redbox presses play on video games rentals across its kiosks

June 16, 2011 | 1:27
pm

Redbox made good on its promise back in April to roll out video game rentals across its network of kiosks, announcing that 21,000 of its 27,000 kiosks nationwide will offer a mix of games and movies starting Friday.

The company, which has rented more than 1 billion movies since introducing its service in 2003, had been testing game rentals for two years at 5,000 of its kiosks. It found that the average revenue of kiosks that rented games as well as movies was 10% to 15% higher than machines that rented only movies.

That's partly because games cost $2 a day to rent, while Blu-ray movies cost $1.50 and regular DVDs are $1. Adding games to the mix also helps Redbox spread its bets. In the fourth quarter last year, the company's operating margins slipped to 14% from 17.6% primarily because of weakness in movie rentals.

Redbox, based in Oakbrook Terrace, Ill., said each kiosk will have 22 to 28 game titles, as well as up to 200 movie titles.

The service, which started in 2003 as vending machines for groceries as well as movies, became the fifth largest DVD rental company by revenue in 2007.